Banco Comercial Português

Good afternoon, Miguel Maya speaking. Welcome to BCP's conference call. As usual, I will begin with the highlights of our performance, being followed by Miguel Barganca and Bernardo Collaço, who will provide additional detail. The first half of this year continued to be shaped by a complex global environment marked by persistent geopolitical tensions and their impacts on energy markets, international trade and inflation. These dynamics have weighed on global economic growth. Despite this backdrop, the Portuguese economy has maintained a solid trajectory. The Polish economy continues to grow at a robust pace, and the Mozambican economy also shows clear signs of normalization. Against this challenging context, the group delivered another quarter with a strong set of results. Net income reached 565.8 million euros in the first half and a 12.7% year-on-year increase. This performance reflects the bank's sustained capacity to generate value and the resilience of our business model as outlined in our strategic plan. In Portugal, we achieved a net income of 470.2 million, an increase of approximately 11%, Reinforcing the profitability trajectory of previous quarters. This performance was driven by a strong growth in net interest income, underpinned by the strength of our commercial franchise, disciplined cost management despite continuing investment in digital transformation, and effective balance sheet management involving interest rate environment. Turning to our international operations, net income increased by over 25%, reaching 183.5 million. This was notably driven by Bank Milan in Poland, which recorded a net income of 167 million, representing a nearly 39% increase compared with the same period last year. For this significant improvement contributed the nearly 65% reduction in charges associated with the Swiss franc mortgage loan portfolio, which stood at 96.7 million in the first half. The CHF mortgage portfolio continues to run off rapidly, having declined by 47% year-on-year, while accumulated provisions for CHF mortgage risk now represent 173% While recent developments regarding FX-related litigations have been positive, some uncertainty remains in the broader banking operating environment. BancMilenio demonstrated strong commercial momentum, with corporate lending growing by nearly 32% and customer funds expanding by approximately 70%, carrying out key priorities of our strategic plan for this market. In Moçambique, although millennial profitability continues to be impacted by provisions associated with sovereign risks, the underlying business performance remains positive. The adjusted net income reached R$ 48 million, an increase of over 18% compared with the same periods of the previous year. Customer funds grew by over 10% and lending expanded by nearly 12%, Confirming the franchise strength and its positioning to benefit from the natural gas projects. The bank maintains a robust position with a capital ratio above 40%. The quality of our relationship banking model is evident across all our core markets. On a consolidated basis, customer loans increased by 8.3% year-on-year to 65.2 billion, while total customer funds grew by 9.8% to 9.8% to 106.7 billion. In Portugal, loans grew by 8.6% and customer funds by 7.2%, reflecting the trust that families and business continue to place in millennials. We continue to operate with very strong capital ratios. Our Comunicatório I stands at 15.1% and total capital ratio at 19.3%, comfortably above regulatory requirements and including just 10% of the first half net income according to the current distribution policy. At the same time, balance sheet quality continues to improve with non-performing exposures declined by 187 million and the NPI ratio falling to 2.2%. The cost of risk remained well contained at 32 basis points, both at the group level and in Português. Turning to our customer base, it continues to expand, underpinned by the quality of our teams and our distinctive digital capabilities. At group level, active customers grew by 4% over the last 12 months, reaching 7.4 million of which over 2.9 in Portugal. Mobile customers continue to grow at 8% per year, now accounting for 75% of the group's total customer base and 67% in Portugal. These figures confirm that customers are increasingly choosing Millennium as their preferred bank and our service continues to be recognized with several important distinctions, including the Consumer Choice Award for the sixth consecutive year and the recognition of the new corporate website as Product of the Year 2026. Moving on to our mobile platform, it continues to deliver a complete and innovative value proposition with superior user experience, and this is clearly reflected in a consolidated upward trend in both interaction and sales. In the first half, the Millenium app recorded 1.7 million logins per day, an 8% increase year-on-year, with customers accessing the app an average of 34 times per month. Sales through the app grew 8%, highlighted by a 32% increase in credit card sales and a 23% rise in personal loans originations. Transactions increased by 9% with international transfers growing by a remarkable 68%. Our digital penetration rates remain at industry-leading levels. In Portugal, 95% of stock market transactions, 90% of savings products and 76% of both investment funds, subscriptions and personal loans are now conducted through digital channels. In mortgage lending, we continue to redesign and digitize the entire end-to-end process with 89% of approval letters already signed digitally, 66% of proposals submitted through digital channels and 36% of these appointments booked digitally. Interactions with customers through BCP Group's digital channels allow us to compete on an equal footing with neobanks with the advantage of having a physical network of proximity, which allow us to know much better the communities we serve and having a human face available when the clients need. This symbiotic relationship between technology and physical presence, which gives trust to the clients in an unpredictable and complex world, doesn't condition the high operational efficiency that we present quarter after quarter. In a challenging environment, we once again delivered a very robust set of results. This performance demonstrates not only the quality of the directions set out in our strategic plan, but also our strong execution capabilities across business performance, operational efficiency, risk management, and discipline capital management, attributes that the market has increasingly come to recognize in BCP. We remain confident in the strength of the value proposition we offer to our customers and in our ability to continue enhancing it through technology with a particular focus on artificial intelligence. This will allow us to further improve our offering and the quality of the service we provide while also reinforcing operational efficiency and risk management. Miguel, the floor is yours.

Thank you very much. In a synthetic view of our income statement, the more detailed view you can see in the annexes, including as per requested by some of you, a quarter by quarter evolution, you can see this in the annex, what you see is a very healthy pattern of growth in terms of the main items of our income statement. The net interest income growing, in spite of the fact that in Poland In Poland, the interest rate came down, the reference interest rate came down by almost 2%, so we were able to maintain the NAI in Poland broadly stable with a very important growth of 11%, of more than 11% of the NAI in Portugal, which is a tribute to our consistency in commercial dynamics and pricing discipline. Commissions growing 6%, which is also a very healthy growth in the present context, mainly taking into consideration the competition of neobanks. Operating costs growing mid-single digit, as commented before, and core operating profit because of growing 3%. I would like here to highlight The positive evolution and the consistency in these dynamics. The profit before impairment and provisions. Because of some one-offs linked to recoveries, grows slightly more, around 6%. And when we convert to the profit before income tax, we benefit from the important reduction of the Swiss franc charges of more than 60%. We have guided to a value that would be this year in any case more than 50% and we are overachieving this target with a value of more than 60% which means that at the end of the day our net income has grown almost 13%. But I would like to comment the consistency of these key metrics that are very much linked to shareholder value creation. So our book value per share and dividend per share growing year-on-year almost 20% and our ROTI and earnings per share growing almost 15%. Going forward we see these dynamics continuing and we see some consistency in these values at least until the end of the year. Our view is that the value by year-end most probably will be above these values in terms of ROT and Inks Per Share, except if something extraordinary happens in geopolitical terms. In terms of group profitability, we see here in terms of NII the main item of the income statement, as you know, the growth of 11% with a growth of the net interest margin. And international operations, The possibility of the resilience of the net interest margin in the context of a strong reduction of interest rates. Here I would make a strong tribute here to our commercial dynamics and volume growth. So we are growing. This is very important. We are growing more than what we had envisaged before. We see that in terms of customer funds, we are growing in Poland, as you will see, More than 17%, around 17%, 1.7, 17%. In Portugal, around 7%, which is also a very important growth rate for Portugal. And in credit, both in Portugal and in Poland, growing credit book around 9%. 9% in Portugal, 9% in Poland, with a different composition. In Poland, due to our strategy, basically growing more than 30% in terms of corporate SME, 32%, corporate SME, and in Portugal more, based on the corporate growth, more than 10%, around 11%. So Portugal, more mortgages, around 11%, Poland, more corporates as per our strategy, around 32%. Growth together with the evolution of interest rates is what explains the evolution of and together of course with pricing discipline is what explains the evolution of our NII. Going forward the guidance that we have given for Portugal was in the beginning of the year we were expecting mid single digit growth In our last conference call, we raised this outlook to high single-digit growth. At this moment, we think we feel comfortable with a low teens growth aligned with what we are saying here in terms of the second quarter of this year. Fees and commissions also very resilient, growing around 6% in consolidated terms. of which 5% in Portugal and 8.3% international operations. There is some compensation here, of course, between the margin of the savings and the fees on the investments, of course, when the markets are more volatile and when the retail investors, I would say, less bullish, they tend to invest less in funds and prefer deposits. The reverse happens in other situations. Right now, of course, one part we are benefiting more in terms of deposits, but still growing around 5% in Portugal, aligned with what we said before of a growth of fees and commissions between mid-single digits and high-single digits. We are closer to the mid-single digits here for the reasons I just explained. In terms of other operating income, we had some extraordinaries These years in Portugal, that we explained in the last results presentation, linked to assets received in the context of credit recoveries that we have sold, realizing capital gains, the remaining relatively stable. Some growth in terms of mandatory contributions, because as you may recall, Last year we benefited in some quarters of a recovery of a previously paid contribution that then the courts have reversed. Operating costs. We are investing, we are investing in AI, we are investing in cyber, we are investing in requalifications and in the context of this investment we have been able to grow only 5.4%. As I commented before, Our guideline here is to try to maintain a top-level cost-to-income ratio, trying to be one of the most efficient retail banks in Europe with our business model. And within this context, we have been able to maintain this cost-to-income of 37% and at the same time continue to invest, which is also attributed to the prudence of our strategy. Cost of risk. We are not seeing yet any relevant signs of the geopolitical turbulence creating credit issues for our corporate and for our retail clients. Up to now, of course, we cannot be complacent. But this is basically what explains this low cost of risk. Of course, I mean, the future is uncertain. I mean, every week, We hear a different piece of news of what may go on in our Moors and in Ukraine and so on, so we cannot guarantee that we will maintain this cost of risk forever, but as far as we see it right now, we are not seeing any additional early warning signals that would lead us to review our guidance in terms of cost of risk. And this, of course, is linked to the reduction in terms of NPEs. In spite of the fact that we already have a low level of NPEs, the normal NPE loan ratio, only loans, is already at 1.6% in Portugal, so it reduced furthermore from 2% to 1.6%, and the NPE ratio as calculated by the EBA with securities and with off-balance sheet items is already at 1.3%. In the international operations this is slightly higher but also in reduction mode. I would highlight here that in Poland, as you know, our business model has much less corporates and has much more consumer loans that typically have a higher NPE loan ratio. Business activity. This is the piece of good news that I had anticipated. The growth of around 10% in terms of customer funds and I would highlight here the growth in the international operations of 15% of which around 17% in Poland. Also a consequence of the strength of our franchise and of the fact that we have a really genuine, differentiated quality service proposal to our customers. The loan portfolio also growing in a healthy way. In spite of the reduction of the NTEs, we have grown the total loan portfolio 8.3% in a very balanced way between Portugal and the international operations, both of them around 8%. In terms of capital, The capital ratio decreasing from next year because, of course, we have distributed dividends, as you know, but stable vis-à-vis last quarter. As you see here in page 22, we were able to generate, before dividends, dividend accruals and share-by-back accruals, as you know, we are accruing a 90% payout, including dividends and share-by-back. So this means that before this 90% payout, we have been able to generate 55 basis points of capital per quarter. As you may remind, what I have commented in the last sessions, is that the normal organic capital generation before distributions should be around between 55 and 60, depending on the growth. In this case, we have been growing more, mainly in Poland. We also have grown in terms of creating Portugal, but most of the growth in Portugal came either from guaranteed loans, mortgages, as you know, or from loans and commercial paper that had already committed lines. So they did not increase materially the RWAs. Morel position, very, very comfortable. We are in the process of executing our plan. As you know, we have issues. 500 million of senior preferred in February and another 500 million of tier 2 in June. So clearly aligned with our plan and comfortably above the minimum ratio. Pension funds, I would say a very cautious ILM management considering the liabilities that are typically fixed rate because our liabilities are basically the pensions that vary with the salaries and which present value also varies with the long-term interest rates, so around the 12-year interest rate. So we were able to deliver a 4.2% profitability that compensates part of the liabilities decrease, so that this means that our access between the pension fund and the pension liability even increased vis-à-vis June of last year at a level of 300 million. I would highlight here that this access is like a capital buffer, so it is What would have to be consumed before any type of impact on capital would occur? Liquidity. Very, very strong liquidity position and this is important. We would like even to have a slightly weaker liquidity position because this means that we will be growing more in terms of credit and we are expecting, so to say, to allocate a part of this liquidity to genuine consumer customer business so as to normalize somehow this liquidity position but in any case this liquidity position is what enables us to be more comfortable in terms of paying term deposit rates so because we don't need funding we can afford mainly in terms of these term deposits that are Less franchise-driven, both in Poland and in Portugal, we are able to deliver a higher margin of deposits. I will pass the floor here to Bernardo that will focus only on some of the slides. Thanks Miguel and good afternoon ladies and gentlemen.

As I did on the last earnings presentation I'll briefly go through some of the slides for each geography and I will not follow the full presentation as you already have seen it. So starting on page 27 Portugal delivered a strong set of results in the first half of 2026 net income increased by almost 11% year-on-year to 470 million supported by a 11.5% increase in net operating revenues, which reached almost 1.1 billion, and revenue growth continued to outpace the cost growth, with operating costs increasing by a moderate 5%, reflecting ongoing investment while maintaining cost discipline. Impairments and other provisions rose 100 million, mainly driven by a prudent risk management approach. Overall, in this slide, as you can see, the business continues to generate robust profitability and positive operating leverage in Portugal. On page 28, net interest income increased by 11.3% year-on-year, or if you want, more than 74 million euros, reaching 733 million in the first half of 2026, despite the low interest rate environment. Growth was mainly driven by the positive contribution from higher loan volumes, which more than offset the negative impact of lower market rates. Additional support came from improved deposit pricing dynamics and lower wholesale funding costs. It is also important to highlight, as we did in the previous quarters, that this is the seventh quarter with consecutive increase on NII in Portugal. Having said that, the bank maintained a resilient net interest margin, which improved from 2.12% in the first half of 2025 to 2.22% in the first half of 2026, reflecting the strengths of its commercial franchise and balance sheet management. Moving to page 29, fees and commissions continue to show a solid performance, increasing by 5% year-on-year to R$ 322 million. Growth was broad-based across the main business lines, but more significant variations were recorded in bank insurance, asset management and securities operations. It is also important to highlight the growth on commissions related with loans and guarantees, reflecting the sustained customer activity and the strength of the bank's diversified franchise. Market-related fees increased by almost 11%, supported by higher investment products, activity, and assets under management. Net trading income increased from 7 million in the first half of 2025 to 41 million in the first half of 2026, and this was mainly driven by gains from the disposal of legacy assets, stemming from the recovery of non-performing loans in the first quarter of this year. Other operating income moved from minus 21.6 million to minus 38.3 million, driven primarily by mandatory contributions, which in the first half of 25 had benefit from the partial reversal of the solidarity surcharge and additionally by some effects related to earn-out occurred in 2025. Going to page 30, Operating costs increased by 5.4% year-on-year to R$ 361 million, reflecting continued investment in the business while maintaining a strong focus on efficiency. The increase was mainly driven by higher administrative admin costs and depreciations, as staff costs registered an increase of around 2%. Despite this cost growth, as I said before, revenue expansion outpaced Expenses, allowing the cost-to-income ratio to stay at 33% at the end of the first half of 26. At the same time, the bank continued to streamline and to modernize its distribution network. Number of employees decreased slightly and are currently below 6,000, and branches also showed a small decrease from the first half of last year. These actions contributed to efficiency gains while preserving the bank's strong commercial presence in service capabilities across Portugal. And as I said, now, if you don't mind, let's skip some slides and move straight to page 34, which shows volumes in Portugal. So on this page 34, Regarding volumes, the bank continued to deliver strong commercial momentum in Portugal with both customer funds and lending recording solid growth. Total customer funds increased by 7.2% year-on-year to 77.5 billion, meaning an increase of 5 billion year-on-year. This was supported by growth across all major categories in terms of customer funds, including demand deposits, term deposits and off-balance sheet products. This performance reflects customers' confidence in the bank and sustained success in attracting savings and investments. At the same time, gross loans grew by 8.6%, representing more 3.5 billion euro a year, DRIVEN BY STRONG ACTIVITY IN BOTH THE CORPORATE AND INDIVIDUAL SEGMENTS. MORTGAGE LENDING INCREASED BY 10.8% WHILE CORPORATE LENDING RECORDED A HEALTHY GROWTH OF 5.4%. ALL IN ALL, THE EXPANSION OF BOTH DEPOSITS AND LOANS HIGHLIGHT THE STRENGTH OF THE BANK'S FRANCHISE AND ITS ABILITY TO SUPPORT CUSTOMERS WHILE DELIVERING SUSTAINABLE BALANCED GROWTH. LET'S MOVE NOW TO PAGE 37. And here this slide shows the contribution from international operations, and it's important to highlight their important contribution to the group's results, with earnings attributable to the group increased by more than 22% to 95.6 million in the first half of 26, and this is after deducting minorities. This performance was mainly driven by Bank Millennium in Poland, whose contribution rose by almost 39% to 170 million, reflecting the resilience of its business model in a more challenged interest rate environment. The result of Mozambique subsidiary remains conditioned by the financial situation of the country. And now, if you don't mind, as a result of Bank Milani, who are already widely known, I will skip also some slides related with Banque Milenio and I'll propose to go straight to slide number 41. And in here, on page 41, regarding volumes, Banque Milenio continued to deliver strong commercial growth with both customer funds and lending expanding significantly during the period. Customer funds increased by 16.8% year on year, representing an increase of more than 5 billion in just one year. This performance reflects the bank's ability to attract new customers and deepen existing relationships with competitive market environments. Gross loans to customers grew by 8.8%, which represents a growth of more than 1.5 billion. Growth was particularly strong in the corporate segment, where lending increased by almost 32%, while the mortgage portfolio remained stable and continued to represent the large share of total loans. Overall, the continued expansion of both deposits and lending demonstrates the strength of BancMilenio's franchise and supports its sustainable growth and profitability perspectives. On page 42, regarding FX, mortgage portfolio, BankMilenio continued to make a significant progress in reducing its legacy CHF mortgage exposure. The mortgage portfolio decreased by 47% year-on-year, reaching just 700 million at the end of June 26, and representing only 0.6% of the gross loan portfolio after legal risk provisions. This reflects the combined effect of settlements, courts, and the natural amortization of the portfolio. At the same time, legal risk coverage continued to strengthen with cumulative provisions reaching 173% of the outstanding CHF mortgage portfolio. The number of individual lawsuits declined by 38% year-on-year, while new inflows of litigation continued to trend lower. As a result, CHF-related costs fell sharply by 65% from 275 million in the first half of 25 to just 97 million in the first half of 26. In conclusion, these trends demonstrate the substantial de-risking of the CHF mortgage portfolio and its progressively lower impact on bank's earnings, on bank millennial earnings. Turning to page 43, about BIM in Mozambique, profitability remained affected by the challenging operating environment, but if you adjust the net income, I mean, it increased almost 20% year on year, demonstrating the underlying resilience of the business. Net operating revenues grew by 4.5%, while operating costs remained broadly stable. Asset quality remained robust, with the NP ratio at 5%, and capital above 40%. And I will conclude here my presentation. And before we move to Q&A, I will hand the floor to Mr. Miguel Bragança for some final comments about the evolution of the strategic plan on page 48.